Insurance for Contractors

Often considered the most important cover, Professional Indemnity (PI) insurance protects you from claims of mistakes in your professional services, advice or designs. Many clients and agencies require PI before you start work. Public Liability insurance covers accidental injury or property damage to third parties. Legal Expenses insurance protects against contract disputes, debt recovery and tax enquiries including IR35 investigations. Employers’ Liability is legally required if you have employees.

Professional Indemnity insurance protects you from claims of mistakes in your professional services, advice or designs. It covers legal defence costs and compensation if a client claims your work caused them financial loss. This includes: professional negligence, unintentional breach of confidentiality, unintentional breach of copyright, defamation and libel, loss of documents or data, and loss of money or goods for which you are responsible. Markel Direct provides PI cover from £50,000 to £5 million.

Public Liability insurance covers you against claims of injury to someone (including clients, visitors or suppliers) or accidental damage to third-party property as a result of your business activities. For example, if a fellow contractor trips over your laptop cable and breaks their wrist, or you accidentally spill coffee on a client's expensive laptop. Public Liability insurance from Markel Direct also includes Product Liability insurance with cover limits from £1 million to £5 million.

Employers Liability insurance protects you against claims of injury or illness suffered by employees due to their employment with you. Legally, every business with employees must hold a minimum of £5 million in coverage. For example, if an employee slips on a wet floor at your office and injures themselves, or trips over a cable and is unable to work due to the injury. Employers Liability insurance from Markel Direct provides £10 million of cover as standard.

Legal Expenses insurance offers comprehensive protection against various legal costs including: contract disputes (such as recovering debts owed by clients), tax enquiries including IR35 investigations by HMRC, and employment disputes with former employees. The likelihood of having a dispute with a client, supplier, or employee is considerable, making this cover highly beneficial for contractors.

Cyber insurance is increasingly important as attacks become more sophisticated. It covers expenses related to managing and recovering from cyber-attacks or hacking threats. If you're the victim of a cyber-attack that compromises your computer systems and client data, the impact could be devastating. Cyber insurance can help meet ransom demands, cover breach notification costs, and pay for restoring damaged systems. Markel Direct provides cyber insurance with limits from £50,000 to £250,000.

Office insurance (Buildings and Contents insurance) protects your premises against accidental damage, including theft and damage caused by disasters such as fire, flood, explosion or storm. It covers office buildings, office contents and computer equipment. Business Interruption insurance can also cover loss of income if you're unable to work from your primary business premises. Markel Direct provides up to £100,000 of Business Interruption cover.

Many clients will require you to have Professional Indemnity insurance before you can start working for them. If a claim is made against you, PI insurance could pay your legal defence costs and expenses, plus any compensation you may be responsible for paying. Check your contract for required cover levels, or ask your agency/client. Markel Direct provides PI insurance with limits ranging from £50,000 to £5 million.

Kingsbridge’s IR35 Protect policy includes their Legal Expenses cover, with the addition of cover for IR35 enquiry costs (taxes, interest, fines and penalties), which can flex to cover the party held liable by HMRC, whether that’s you or your fee-payer. Premium IR35 Protect also includes unlimited status reviews using Kingsbridge’s award-winning IR35 Status Tool.

Legal Expenses can only cover the legal costs and professional fees related to defending an IR35 investigation. It won’t cover financial consequences incurred following the enquiry. IR35 Protect adds this additional cover, so you (or the fee-payer) can be protected against taxes, fines, interest and penalties.

The policy can follow whoever HMRC holds liable. That can be you, your agency, or your end client.

A single review is £50 plus VAT. Premium IR35 Protect includes unlimited assessments. Most results come back straight away. Borderline cases go to in-house consultancy. The result is not legally binding, and neither is HMRC’s CEST tool, because IR35 is case law.

You need an up-to-date outside IR35 determination from its status tool or another approved reviewer. Brookson, Champion and Larsen Howie are named for retrospective cover. Contact the team for the current list.

No. It is not required by law. A client contract often asks for it. The cover is a sensible choice for a contractor working through a personal service company.